Alberta Health Services faces lawsuits, judicial review over air ambulance contracts
Losing bidders in Peace River and Medicine Hat slam contract process as ‘a sham’ and unfair
Two Alberta airline companies are taking Alberta Health Services to court, with Northern Air alleging the agency's process for selecting air ambulance operators was "dramatically devoid of the appearance of fairness" and Integra Air alleging it was "a sham."
AHS launched a request for proposals (RFP) process at 10 locations across the province.
Before Can-West Corporate Air Charters was awarded the contracts for eight locations last March, AHS contacted Northern Air in Peace River and Integra Air in Medicine Hat and Calgary to extend their existing contracts in those locations for three months.
The company that landed the contracts was supposed to take over in April 2017, but Can-West didn't have the infrastructure in place to do so in either location.
Nate Hilman, president of Northern Air which requested a judicial review in September 2017 after repeated short-term extensions of its contract, told CBC News it suggests "serious issues" with AHS's procurement process.
Integra Air filed an $8-million lawsuit in January 2018 against AHS and CanWest, alleging that Can-West, favoured by AHS, misrepresented its ability to carry out the contractual obligations.
AHS denies any wrongdoing, said spokesperson Kerry Williamson in an email.
"AHS remains confident that it conducted a fair RFP process with the goal of ensuring safe, excellent air ambulance service across the province," the email said.
Can-West did not comment and pointed CBC News to court documents.
The search for operators
In court documents, Northern Air and Integra Air both note AHS said potential air ambulance operators had to have bases in the locations for which they were bidding to serve.
Can-West did not have bases in Peace River or Medicine Hat.
"They selected an unqualified proponent for the Peace River base, at least. They were unqualified back in 2016. They were unqualified at the award of the contract in March of 2017 and they're still unqualified today," Hilman said.
In the application for a judicial review, Northern Air cites concerns about Can-West's ability to obtain operating certificates or fulfill the aircraft and infrastructure criteria and experience for specialized services - all criteria to provide air ambulance service, according to the document.
"The manner in which AHS conducted the [request for proposals] process has been so dramatically devoid of the appearance of fairness that the administration of justice is at risk of being brought into disrepute," the document states.
The judicial review is scheduled for June 2018 and is expected to last six to eight weeks.
Northern Air will continue to provide air ambulance for the municipality until March 31, when the latest extension of its contract expires.
The future is uncertain after that, when Can-West is scheduled to take over.
The company, which is still not yet set up at the Peace River Airport, blames the municipality, alleging it has been blocked in subsequent attempts to obtain a hangar there.
Peace River Mayor Tom Tarpey told CBC News the airline did try to acquire a hangar at the airport, but said all of the leases had been spoken for.
"They still are, actually," Tarpey said.
Can-West filed a lawsuit against the Town of Peace River on Nov. 10.
According to a court briefing document provided by the town, another company, Highland Helicopters with a hangar at the airport, has agreed to transfer its lease at the airport.
Tarpey said the municipality has been advised not to permit the transfer until the judicial review is carried out.
"I would say there is a possibility of them getting a hangar, but I think we should wait until the judicial review is done," Tarpey said.
Tarpey noted that the hangar Can-West is pursuing is not equipped with a taxiway. One would need to be built, requiring NavCan and Transport Canada approvals, the mayor said.
Avoiding service interruption
In its email statement, AHS said the agency is "reviewing options to ensure patient care is not impacted if Can-West is unable to secure appropriate hangar space by April 1."
Hilman said Northern Air is "absolutely willing" to work with the agency to continue to provide air ambulance service from Peace River, but has not been contacted about a further contract extension.
Northern Air, based in Peace River, is the sole airline offering chartered flights out of the Peace River Airport. The mayor previously voiced concerns about the airline leaving in the event it loses the air ambulance contract.
Northern Air offers daily scheduled flights between Peace River and Edmonton.
Hilman would not disclose the value of the contract, but court documents provide some details.
A significant portion of the airline's employees work with air ambulance services.
Hilman noted that the RFP process has caused "significant challenges" for his company with consecutive short extensions of the air ambulance contract.
"That's very hard on our employees. It created a great deal of uncertainty," Hilman said.
"I don't really want to speculate on Northern Air's future," he said. "We will make every effort that we can to maintain our level of service in Peace River."
Integra Air sues for damages
Integra Air, the long-time air ambulance operator in Medicine Hat and Calgary, sued AHS and Can-West in January 2018, seeking $8-million in damages.
Integra alleges in the lawsuit that the "process was a sham" and echoed many of the the same concerns cited by Northern Air in its application for a judicial review, including that Can-West did not have space at the local airport (again, a requirement to land the air ambulance contract).
We will make every effort that we can to maintain our level of service in Peace River.- Nate Hilman, president of Northern Air
According to the lawsuit, AHS was in contact with Can-West, its "pre-desired proponent," during the request for proposals process.
Integra alleges the agency maintained its commitment to Can-West, even after learning that "Can-West had made misrepresentations and had provided inaccurate and/or misleading information in one or more of its proposals."
Integra claims it was led to believe in March 2017 that its contract would be extended in Medicine Hat and Calgary, given that Can-West was not ready to take over for a year.
In June 2017, Integra alleges AHS issued a notice that the econtract would be split. Can-West would begin operations out of Calgary in September.
Integra is seeking $6.5 million, its estimated "lost profit on this final contract." The airline is also seeking an additional $1 million for lost service fees and $500,000 in punitive damages.